View PhotoSmoke billows from the spot where the Su-24 warplane crashed in Hatay

Russia on Thursday pledged broad retaliatory measures against Turkey’s economy in revenge for the downing of its warplane, as recriminations between Moscow and Ankara reached fever pitch.

While Moscow conspicuously ruled out any military retaliation against NATO member Turkey, Prime Minister Dmitry Medvedev said he had given ministers two days to work out “a system of response measures” in the economic and humanitarian spheres.

He said the broad punitive steps for what he termed “this act of aggression” could include halting joint economic projects, restricting financial and trade transactions and changing customs duties.

Measures could also target the transport and tourism sector after Russian President Vladimir Putin earlier backed a warning to citizens not to travel to Turkey, where nearly 3.3 million Russians went on holiday last year.

The move could have a major impact on the economy of Turkey, which over the past 10 months has exported agricultural produce and food worth just over $1 billion (940 million euros) to Russia.

In another move likely to infuriate Turkey, lawmakers from the Kremlin-friendly A Just Russia party introduced a bill calling for a maximum punishment of five years in jail for those who deny the mass killing of Armenians by Ottoman Turkey in 1915 was a genocide.

Turkey has always denied the killings were a premeditated attempt by the Ottoman Empire to wipe out the Armenians.

– ‘Wider geopolitical conflict’ –

Meanwhile, Putin and Turkish President Recep Tayyip Erdogan traded barbs, with the Kremlin strongman demanding an apology for Tuesday’s downing that led to the death of one of two pilots and a soldier who took part in a failed rescue operation — Russia’s first combat losses since the start of its Syria campaign.

Erdogan in turn dismissed Moscow’s claims he was propping up the Islamic State and accused the Kremlin strongman of slander.

The downing raised fears it could fuel a wider geopolitical conflict and highlighted the difficulty of forging consensus on the fate of Syria as Putin prepares to host French President Francois Hollande on Thursday.

The shooting down of the aircraft is thought to be the first downing of a Russian plane by a NATO member since 1952 when US pilots shot down a Soviet plane near Vladivostok during the Korean War.

“We still have not heard any articulate apologies from Turkey’s highest political level nor any proposals to compensate for the harm and damage nor promises to punish criminals responsible for their crimes,” Putin said.

“We believe treacherous stabs in the back from those who we considered partners and allies in the anti-terror fight to be absolutely inexplicable,” said Putin, who also accused Turkey of buttressing the IS jihadists financially and militarily.

– ‘Shame on you’ –

In Ankara, Erdogan insisted his country did not buy any oil from the Islamic State group, apparently shaming the Russian strongman without referring to him by name.

“They claim Turkey is buying oil from Daesh,” Erdogan said, using another name for IS.

“Shame on you. Those who claim we buy oil from Daesh are obliged to prove it. If not, you are a slanderer.”

The Turkish foreign minister Mevlut Cavusoglu responded to calls for an apology by saying: “We don’t need to apologise on an occasion that we are right.”

Turkey insists its forces repeatedly warned the Russian jet on Tuesday, an assertion backed up by the United States.

Some observers believe Ankara shot down the jet out of anger over Moscow’s strikes against ethnic Turkmen in Syria, a minority it views as an ally in its struggle against Bashar al-Assad’s regime.

Moscow claims the plane never crossed over the border from Syria, and Russian Foreign Minister Sergei Lavrov has branded the incident a “planned provocation.”

Turkey’s military said it did not know the warplane was Russian and that it was ready for “all kinds of cooperation” in an apparent bid to defuse tensions.

The raging tensions have threatened to derail Hollande’s marathon effort to try to cobble together a broad anti-IS coalition that would include global and regional players.

After jihadists killed 130 people in Paris this month in attacks claimed by the IS group, the French leader travelled to Washington for talks with US President Barack Obama and then met German Chancellor Angela Merkel in Paris.

Few expect the Kremlin talks to produce a breakthrough, however.

Experts say it is hard to imagine Russia and Turkey in the same anti-IS coalition given their stark differences on the Syrian conflict and the new tensions over the Russian jet.[]